Welcome back, everyone, to the 2025 RBC Global Healthcare Conference. My name is Greg Renza, one of the biotech equity research analysts, and we're pleased now to be joined by CorMedix , joining us from the company, CEO Joe Todisco. Joe, it's great to have you. Good to see you, and thanks for joining us.
Thanks, Greg. Good to see you as well.
Great. Look forward to the discussion. For those who aren't as familiar with the CorMedix story, could you provide an introduction to the company, to DefenCath, that burden of catheter-related bloodstream infections and end-stage renal disease?
Sure. So, you know, at present time, we're a publicly traded, commercial-stage biotech company. Market cap currently just under $900 million. Our lead product, DefenCath, is indicated for the reduction of risk associated with catheter-related bloodstream infections in patients undergoing chronic hemodialysis through a central venous catheter. I know that's kind of a mouthful. Now, the product itself is what's called a catheter lock solution. It's a combination of heparin, which keeps catheter patency flowing, and our proprietary new chemical entity, taurolidine.
Taurolidine is an amino acid with broad-spectrum antimicrobial activity against gram-positive and gram-negative bacteria, as well as against fungus. In our phase three clinical study, we demonstrated a 71% reduction in risk associated with catheter-related bloodstream infections. We commercialized the product or began commercializing the product about mid-year last year. We have announced three quarters of sales. We've given our first half of the year guidance. Launch is going very well. We've guided first half of the year to the top end of our previous guidance range, which was $62 million-$70 million, and we're currently estimating about $70 million of net sales for the first half of 2025.
Great. I certainly want to talk about the feedback, the launch traction that DefenCath is getting. Maybe first, Joe, I want to just take a step back and just talk about the treatment and the care management landscape for hemodialysis patients with CVCs. How does the DefenCath fit in there? We get a lot of questions on this and that patient management. Maybe walk us through some of those, some of that picture, please.
Certainly, the first and foremost is a number of things from a hygiene standpoint that patients should be doing and their caregivers should be doing to keep the catheter clean. If you're asking from a competitive landscape standpoint, from a drug product standpoint, we're the only approved drug product from FDA as a catheter lock solution, right, that has demonstrated antimicrobial activity and demonstrated in a large-scale phase three study a reduction in risk associated with catheter-related bloodstream infections. There are other antimicrobial-based products on the market, mostly devices. There are antimicrobial caps. They can be used with DefenCath. I think certainly that's the future of where we would be guiding providers, right, to do as much as possible for patients in terms of preventing infections.
Excellent. With DefenCath now being on the market for a little bit in the launch, well received in the outpatient segment, just talk to us a bit about what's been working well for the program, for the product that's really been behind its uptake.
Look, it's a fairly straightforward concept, right, in terms of every patient that has a catheter that's getting hemodialysis, they're getting hemodialysis three times a week. That catheter needs to be locked with a lock solution, right? Traditionally, that's been heparin or saline. Neither of those demonstrates any antimicrobial capabilities. From a workflow standpoint, it really isn't much different, right? Now you're locking with DefenCath instead of heparin or saline. From that standpoint, it has been fairly seamless in terms of education. You know, we see a large amount of concentration amongst the customer base in outpatient hemodialysis, right? You have two large dialysis operators, three mid-sized dialysis operators.
Those five combined make up somewhere around 90%-92%, I think, of the market. We've got four of those five under contract, three of which have implemented. Obviously, we've talked quite a bit. U.S. Renal Care was the initial mid-sized dialysis operator that adopted utilizing the product. That ramp has gone very well. We onboarded two others, IRC and DCI, late last year and continue to increase patient numbers with both of those providers. We are optimistic. As I said, we have one of the LDOs under contract. We have not disclosed which one. We are optimistic on starting utilization around mid-year. We will keep shareholders and investors updated once we officially make progress and begin implementation.
With the progress over the past quarters, as far as keeping investors updated, I think it's been applauded for maintaining that transparency, that visibility on what you think the performance could look like. Always, all certainly cautiously optimistic, but maybe transitioning to optimism. Just talk about some of the progress stacking up to your base case assumptions. Done a nice job of providing the guidance for the first part of the year. You helped the analysts and investors out last year, even on a sequential basis. Just walk through how that trajectory is stacking up.
Look, I mean, giving guidance is always a challenge. Certainly, there's a reason why a lot of launch stage companies don't give guidance, right? Because forecasting is difficult, especially when you're in launch mode. What we try to do is give as much visibility to analysts and investors as we possibly can. The most we've been able to guide so far this year was the first half of the year. That's a large, in part, because the timing of when our LDO comes on board and the scale of which they implement really can drive wide variability in the back part of the year.
We don't have enough color yet on either of those items to say, you know, we can give a revenue range or we can give a forecast range today. Hopefully, as we progress over the next couple of months, we can get closer to giving that type of guidance. I think in terms of the first half of the year, certainly, I'm very pleased with the trajectory. You know, we've talked about, and the reason why we guided over the first half of the year was, you know, there were some profit or price-related incentives why U.S. Renal bought a little more inventory in the first quarter versus the second quarter.
We are seeing, you know, that inventory increase in being used in the second quarter, right? You know, as we talk about the full year, I do expect to see growth of utilization with existing customers, the existing base business in terms of new patients on board, as well as adding new customers, both, you know, hopefully the LDO coming on board, as well as patients on the inpatient side, which we talked, or hospitals on the inpatient side. We talked quite a bit about launching that new field team earlier this year and starting to see progress.
Yeah, that's great. Maybe we'll just talk about that mix of outpatient versus inpatient. The inpatient partnership with Syneos, you have a history with the organization as well. How's that progressing? At what rate do you anticipate some of that contribution from the inpatient side?
First, I just want to say it's great working with Syneos. I've had a number of experiences working with them in the past. When we talk about representatives themselves, the key account managers, I view them as CorMedix employees, right? They might be, their paychecks might come through Syneos, but they're dedicated to CorMedix. They're trained by CorMedix. They're interviewed and hired essentially by CorMedix. You know, the flexibility that Syneos provides is they've got deep resources in terms of recruiting, in terms of data, right, in terms of the ability to manage fleet, a number of things that, you know, a company of our size would have to have a number of in-house employees to be able to handle those functions.
They really offer me a lot of flexibility there. In terms of the quality of the key account managers, that's on us, right? We have to interview and we have to hire good people. I've been very impressed with the team so far that we've put out in the field. Progress has been going well. You know, inpatient itself, as we talked about on the last call, I think for April itself, about 6% of our unit shipments went into the inpatient segment. I don't expect, you know, should the LDO come on board and take larger volumes, that 6% is not going to remain the same. I think directionally, I would expect the amount of shipments to grow as we add new accounts as we progress throughout the year.
Okay, great, great. I want to talk TDAPA, the big topic for investors thinking about at the post-TDAPA opportunity. And for those that aren't fully up to speed, just walk us through the current TDAPA reimbursement process and what it means for.
The current TDAPA is a five-year adjustment to the dialysis bundle, right? Patients that have end-stage renal disease under CMS, essentially, all goods and services in terms of providing hemodialysis are part of a bundled payment system. Now, CMS created an incentive for innovative, you know, to invest in innovative products, which would be an add-on payment to that bundle, but it's transitory, right? There are two years, the first two years where reimbursement is essentially at what they call ASP, and then there are three years of a bundled adjustment that has some price adjustments. The structure of TDAPA is largely for fee-for-service patients. Medicare Advantage right now, at least with respect to our product, we're seeing good claims in terms of the MA plans following TDAPA, right, and reimbursing TDAPA claims. That's been beneficial.
What we want to do for the long term of DefenCath, we're doing a couple of things, right? Because we recognize that, right, TDAPA is transitory and we want to demonstrate long-term sustainable or achieve long-term sustainable reimbursement for the product. We are in the process of running a real-world evidence study with U.S. Renal Care. We started data collection back in July of 2024. The goal would be to utilize data that can demonstrate reduction in hospitalizations, lost chair time, reduced antibiotic use, a number of metrics that really get to the cost, you know, per patient of a CRBSI. We have a number of data points over the years that point to somewhere between $90,000-$120,000 per infection as the cost to Medicare or Medicare Advantage of a patient receiving one of these infections.
Our goal would be, as we progress through TDAPA, to kind of change our strategy and seek to contract directly with the MA plans, right? Because the MA plan ultimately is the one for their patients. It's on the hook for both sides of the equation, right? They're the ones that are paying the hospitalization costs as well as paying the drug costs. Now, from a longer-term standpoint, in terms of the value of DefenCath, we've also started running additional clinical studies, right? We've kicked off our study in total parenteral nutrition, first patient dose last week.
We're very happy about that. It's a relatively modest-sized study, less than 150 patients. We think we can run it end-to-end in less than 18 months with the goal of hopefully commercializing by the end of 2027, early 2028. You know, that indication will fit very well with our existing field deployment on the hospital inpatient side as well and provide, you know, additional revenue growth opportunities longer term.
Okay. Maybe we'll stick with TPN because we certainly view that as a nice expansion opportunity. I want to get back to current hemodialysis patients. In sticking with that growth, I think you've recently, and over this year, you've put some numbers on what the TPN opportunity could be. Very reassuring that you've got the first patient, you've got the trial listed. Think about running a fillable trial, a pivotal phase three. Just walk us through, number one, what opportunity are you coveting here? Number two, just the steps in the process when it comes to the clinical trial.
Sure. From a total addressable market standpoint, we see the TAM somewhere between $500 million and $750 million, right, depending on price point. There is some variability in terms of size of the market, in terms of volume. We think it is around 10-12 million vials a year of 3 ml DefenCath. You know, we have put out some peak sales guidance that, you know, depending on penetration, we think we could be somewhere between $150 million and $200 million peak annual sales for DefenCath in that space. About 1/3 of it is hospital inpatient, about 2/3 is in the home. A little bit more traditional reimbursement landscape, a lot of commercial patients compared to ESRD, right, which is 85% Medicare.
When you think about that broader kind of peak guidance that you're laying out, what sort of legwork is required for DefenCath in that larger majority of TPN patients that reside at home? How operationally would execution look?
That is something we're still going to have to work through as we get closer to really understand what type of additional resources we're going to need and instructions for caregivers, right? We have explored to a limited extent home hemodialysis, right? We're starting to do a little bit of research, and we think that will be able to lend itself. The work we do for support of home hemodialysis should be able to transport over to TPN as well. It is a valid point, something we're going to look at over the next year.
Yeah. And just as far as the risk reduction, any benchmarks that we could be thinking about, certainly the prior data that led to the approval when we think of TPN, you know, what performance would we want to see DefenCath sort of put out?
I certainly like to see as good or better, right, than what we've seen in the DefenCath. I think the threshold set in the study is lower, right, to meet statistical significance. You know, as I said, I'm hopeful and optimistic that we're going to show as good or better result in TPN. At the end of the day, our view is that a catheter is a catheter. We're not treating, you know, short bowel syndrome, or we're not treating hemodialysis, right?
We're theoretically, the other product's preventing biofilm buildup in the catheter, and that biofilm leads to bacteria and leads to infection, right? To the extent that that could be replicable across disease states, it really should be irrelevant what the disease state is, as opposed to, I think, factors that are more relevant would be how often the catheter is accessed, how long the DefenCath sits in the catheter, things like that.
Okay. All right, great. And then when it comes to maybe political tide shifting, maybe policy momentum, how should we be thinking about reimbursement evolution within CMS with respect to DefenCath? Lots of macro issues, and you get asked about this quite considerably. How do you put it into context?
No, these are questions we get quite often, that along with tariffs, right? I'll just throw that out there that, you know, we view our tariff exposure as fairly minimal. Most of our cost of goods sold comes from the United States. We do, you know, our fill finish in Europe, but we think the tariff exposure there is quantifiably low, probably in the $0.35-$0.40 a vial, right? Not something that we see as overly significant. Now, you know, over the last few weeks, there's been a lot of communications around pharmaceuticals out of this administration. Certainly everyone is familiar with President Trump's executive order on most favored nation pricing. We've looked at that as well with respect to DefenCath. We currently don't think that we have any exposure in that area.
We've not pursued approval of our product outside the United States as a pharmaceutical. And to our knowledge, no other jurisdiction in the world has approved this combination of heparin and taurolidine as a pharmaceutical product, right? So there's really no apples-to-apples comparison there. Now, I think what you're getting at is some of the communications that came out of CMS over the last couple of weeks, which for us are incredibly interesting, right? You had a recent forum with Dr. Oz and one of his deputies, Abe Sutton, that really talked about, you know, the future of CMMI and the future of CMS for this administration and wanting to focus on things like prevention, right? You know, how do we engage in preventative healthcare that also brings down costs and brings down overall spending with Medicare? I think that's a great opportunity for us.
You know, there's a lot of things that we have going on, you know, certainly behind the scenes where, you know, we're looking to engage, you know, more directly with this administration and hopefully, you know, fulfill, you know, the goal of both of those things, right? More widespread adoption, bringing down overall healthcare costs, improving patient health.
Yeah, right, great. Even near term, we're talking about the real-world evidence study that you're running U.S. Renal Care, so continuing to build a body of data. As we translate that to this year into 2026, what metrics do you believe MDOs and LDOs are looking to encourage continual ordering of the DefenCath?
Look, I think if we can demonstrate in a real-world setting, you know, material impact on infection rates itself, I think, you know, right there, that's, I think, the key data point that if people see, you know, what we can do for, you know, for infections, you know, as a corollary to that, you know, if we can have, if we can show in that study that we have an impact on mortality, that's even bigger.
Yeah.
Right? So those are the things that, you know, that we certainly want to show, right, to the LDOs, right? To the payers, we want to show cost impact.
Right. Excellent. As you mentioned, LDO coming online, investors are really keen on essentially that delta that we can anticipate on the top line and not asking for guidance, but maybe just set the stage for so when it comes to the pace of operationalization with your LDO partnership, how should we consider the inputs of quantifying that?
Look, I don't have enough, I think, clarity today to give you that specificity, but I'm hoping to have it right over the next couple of weeks. You know, when we report our second quarter, I'd like to be able to give a little bit more directional guidance on where we think, you know, the second half revenue could land or, you know, put folks in a ballpark.
Great. Maybe just in closing, we think about the financial structure of the company. Spend some time just talking about your cash position and just the cost structure with respect to the partnerships and with respect to the spend to really grow and get to that, maintain that cash flow positivity.
Yeah. Look, we operate the business on a pretty SG&A-light structure compared, I think, to other similar-sized companies, especially going through launch, right? The footprint, even with the new inpatient field team, is relatively modest. We've got about 30, you know, all in 30 key account managers and directors that are out in the field. On the outpatient side, it's an even smaller team, right? A lot of the, because of the concentration of the customer base, we've got a handful of, we've got some inside sales folks and we've got some key account managers focused on small accounts. Excuse me, the larger accounts, right, we handle more at the executive level, right, in terms of those negotiations.
From an SG&A spend standpoint, I don't expect any, you know, material increases over time with SG&A for the commercialization of DefenCath. R&D spend is going to tick up a little bit. We've talked about, you know, the TPN study is going to be, you know, $12 million- $14 million over the course of the study. But, you know, for the most part, you know, we've, you know, we've guided what our full-year cash SG&A spend should be. I don't expect any significant deviation in 2026 either. It should be largely in line.
Just in the last few minutes, want to see if there are any questions from the audience in New York? One here.
I'm wondering, you know, from your TPN study, you're working with, yeah, where the dialysis work could potentially improve as opposed to that data as well.
Oh, that's an interesting question. Look, I think any data that supports, certainly if it shows higher efficacy, right, I think that that's beneficial. That we would certainly look to, you know, to loop that into the conversation. You know, we say, obviously, right, a catheter is a catheter. I think that, you know, we certainly view that. What we'd also like to be able to do with that data, I think longer term, is a broader conversation with the FDA, right? That combined with our expanded access, excuse me, sorry, where, you know, we've got a number of disease states where we're going to be tracking data to go to, excuse me, sorry. Sorry, to go to FDA and seek a broader label indication.
Right.
Sorry. Wow. Sorry.
Any other questions for Joe? One more?
Look, I mean, infections happen pretty fast, right? For the most part, data shows that about 50% of CRBSIs happen the first 30 days the patient has a catheter. They can happen quickly. Typically, they get diagnosed at the hospital. The patient presents to the hospital, gets diagnosed. Average length of stay, I think, is around two weeks, usually, with a very high recurrence rate. Recurrence rates are over 72%. You know, my thought is within, you know, we haven't decided whether to do an interim look into the real-world evidence study, but I would think, or I'm hopeful, a year of data might be sufficient to show the meaningful impact that we're looking for.
Looks like we're just bumping up on time. Joe, I really appreciate it. Thanks for the update. Lots of exciting developments with DefenCath, and look forward to the progress.
Thank you so much. I really appreciate it.
Thank you.
All right.